Information on Your Home Closing

The big day is right around the corner and you don't know what to expect.  Review these common closing costs and documents so that you'll be better prepared to understand the process. 

Common Closing Costs

Your lender must disclose a good faith estimate of all settlement costs. A check to cover your closing costs will probably have to be a cashier's check. The title company or other entity conducting the closing will tell you the required amount for:

• Downpayment.
• Loan origination fees.
• Points, or loan discount fees you pay to receive a lower interest rate.
• Appraisal fee.
• Credit report.
• Private mortgage insurance premium.
• Insurance escrow for homeowners insurance, if being paid as part of the mortgage.
• Property tax escrow, if being paid as part of the mortgage. Lenders keep funds for taxes and insurance in escrow accounts as they are paid with the mortgage, then pay the insurance or taxes for you.
• Deed recording fees.
• Title insurance policy premiums.
• Survey.
• Inspection fees—building inspection, termites, etc.
• Notary fees.
• Prorations for your share of costs such as utility bills and property taxes.

Be sure to keep copies of the following closing documents in a safe place for future reference.
	The Real Estate Settlement Procedures Act (RESPA) statement. This form, sometimes called a HUD 1 statement, itemizes all the costs associated with the closing. You'll need for income tax purposes and when you sell the home.
	The Truth in Lending Statement summarizes the terms of your mortgage loan.
	The mortgage and the note (two pieces of paper) spell out the legal terms of your mortgage obligation and the agreed-upon repayment terms.
	The deed transfers ownership of the property to you.
	Affidavits swearing to various statements by either party. For example, the sellers will often sign an affidavit stating that they have not incurred any liens on the property.
	Riders are amendments to the sales contract that affect your rights. For example, if you buy a condominium, you may have a rider outline the condo association's rules and restrictions.
	Insurance policies provide a record and proof of your coverage.